You are as good as the company you keep-be it of friends or of fund managers. In the company of the latter you have a good chance of becoming wealthy too. The fund managers we are talking of make a living buying and selling stocks and employ some of the best financial brains to research the companies they bet on. They have invested over Rs 1,00,000 crore in some of India’s best stocks. Wouldn’t it be great if you knew exactly which stock the mutual funds are buying and when?
Actually, you can. Just turn over to page 28 of this issue. A combination of increased transparency and better use of technology has made the stock market more accessible and safer for the common man. But it is still the riskiest of all investments and you shouldn’t step in unless you have done enough homework. And you are in the same ring as the experts. Our cover story this week helps you catch the stocks that the pros are buying-both of big and large, and of small and unknown companies. How many times have you concluded a stock’s best days are behind it, only to watch it soar as you stand on the sidelines? You know Infosys is a great stock, but is it so at the current price of Rs 2,197? A year ago the stock was trading at an even higher price of about Rs 3,000. If you had invested in it then, your return on investment would have been 51% today (recent bonus issue factored in).
Two caveats: a stock with strong buying by top performing mutual funds has a greater probability of making you money. But following the fund footprint is no reason to ignore fundamentals (earnings, sales etc). Even if you don’t ever want to invest in stocks-which is perfectly fine-you probably do invest in mutual fund schemes. Our cover story will also help you understand how equity mutual funds go about investing your money.
As a mutual fund investor you probably know the virtues of following a systematic investment plan (SIP). Well, we found something that gives better returns than SIP. Look out for the investment plan we call VIPs on page 20 and choose what investor type you want to be: Mr Cost or Mr Value.
Our cover package took so much of our time and so many of the magazine’s pages that we are holding on to the promised new sections, except for two small but significant ones-Tax Management (page 60) and New Fund Review (page 24). Also stop at page 84 to discover life in cyberspace without Google.